When the Group of Six (now the Group of Seven, or G7) met for the first time in 1975, it did so amid the backdrop of an unprecedented oil crisis, soaring inflation, and a tumultuous stock market. The Dow Jones Industrial Average, for instance, had fallen nearly 50% over a 20-month period, and interest rates were rising—eventually spiking to 21% by 1980 in the U.S.
The goal of the inaugural meeting was to address the economic problems threatening global stability, all in the name of human rights, security, and sustainable development. Even though the G7’s June summit was postponed until at least September, we must be steadfast in urging our leaders to remember these founding principles when they eventually meet. We must remind our leaders that an inclusive economy is a strong economy.
On the eve of the G7 summit, remember women
In light of current events surrounding the coronavirus pandemic, we should request our G7 leaders to adopt the following four resolutions:
- Embed gender equity into the future of work by closing gender gaps in STEM education, with a specific focus on AI.
- Use gender-based budgeting to craft stimulus packages and social protections that recognize the value of unpaid labor.
- Provide equitable and adequate funding to female-led businesses.
- Incentivize the adoption of AI-engineered technologies to ensure a sustainable transition to remote work.
As you can see, gender equity is a common denominator among these four requests. That’s because gender equity is key to creating sustainable and effective policy solutions to contain the economic fallout of COVID-19. This financial downturn is having an outsized and negative impact on women, and as the economics tell us: When women get left behind, everyone gets left behind.
By embedding gender equity in forthcoming recovery efforts, we can create potent policy solutions to ensure that 50% of the population that is female doesn’t get left behind. In doing so, we will turbocharge the velocity of our economic recovery. This crisis is an opportunity to bend the arc of history toward inclusion, close the gender equity gap, and in turn unlock upwards of $12 trillion from the global economy.
Let’s walk through each of the four G7 requests to understand how they fit into our larger economic recovery.
Embed gender equity into STEM education
Women are 50% of the population yet represent 22% of the world’s AI workforce. We have a 28-point gender gap in the AI talent pool and must heed its protracted repercussions. We cannot continue to program our biases into the future world.
Engineers write, train, and deploy the algorithms that eventually become our arbitrators of justice, our hiring managers, our loan evaluators, and much more. AI is already making life-changing decisions at scale, and the engineers behind our AI must represent gender-balanced backgrounds.
Not only will this help mitigate biases before they are amplified into our society, but it will also foster innovative, socially beneficial use cases for AI. This request is all the more crucial as three out of four companies plan to accelerate automation in their operations due to COVID-19.
We can approach gender equity in AI from several angles. First, we can standardize digital literacy in K-12 education so that girls are not stigmatized away from pursuing STEM education.
Second, we can incentivize partnerships between community colleges and corporations to fund skills-based degree programs in STEM. These partnerships can take the form of digital apprenticeships to further embed gender equity into our future workforce.
Third, leaders can directly address the fears of the 92% of managers and 77% of senior leaders who feel they are “poorly prepared for the future” by launching upskilling and reskilling initiatives. (This is similar to the EU’s $825 billion stimulus plan that has a heavy focus on AI and upskilling.)
This is especially relevant for the (at least) 40 million people who have filed for unemployment as a result of COVID-19. When the economy recovers, many people may find that their pre-COVID-19 jobs don’t exist anymore. In fact, 88% of jobs lost in three recessions over the past 30 years were those deemed “routine” and “highly automatable.” Here, too, AI can help organizations personalize learning journeys and fill critical skills gaps in today’s labor market.
Practice gender-based budgeting
The term “she-cession” to describe this crisis stems from its disproportionate impact on women. Women, in aggregate, accounted for 55% of all jobs lost in April, and their unemployment rate shot up to 16.2%—versus 13.5% for men. The situation for women becomes even grimmer when we overlay jobs data with other indicators, such as women’s share of unpaid labor or the preexisting gender wealth gap.
We must demand that forthcoming fiscal stimulus account for these gender differentials through gender-based budgeting. This request for gender-based budgeting is not a women’s issue, and it is not a handout. It’s a matter of efficacy. Public policy performance depends on how accurately we direct and allocate resources. By applying the gender lens to fiscal policy, we can strengthen its impact and ensure funds reach those who need it most. For example, the 70% of our nation’s poor who are women and children.
Secure funding for female-led businesses
Female-founded startups support a healthy economic ecosystem. We cannot let them fall due to macroeconomic conditions outside of their control. While COVID-19 has induced financial hardship for many startups regardless of the founder’s gender, female-founded startups are in an especially precarious situation because they receive less funding than male-founded startups. In 2019, for example, they received a mere 2.7% of all venture capital investment.
Providing adequate and equitable funding to female-led businesses will help them survive today’s economic downturn and supply fuel to tomorrow’s economic engine. Startups generate jobs, boost productivity, create new markets, and develop technology that large enterprises depend on. Female-led startups in particular benefit the economy because they have greater levels of capital efficiency— they generate 78 cents for every dollar invested in their companies compared to male-founded startups, which generate 31 cents for every dollar invested—and provide 63% better investment returns than all-male teams. Moreover, 72% of female entrepreneurs believe that their businesses should have a positive charitable impact; 65% of male entrepreneurs agree.
Again, this request is an investment in our economic recovery, not a handout for female entrepreneurs. Leaders can meet the acute needs of female-led businesses by awarding capital in the form of grants, not loans. Grants should be awarded through a fund designated for female founders, and policymakers should immediately allocate enough capital to close their countries’ gender funding gaps. In the U.S., this would amount to an immediate cash infusion of $11 billion. Again, Canada and France are already leading the way on this front.
Ensure equitable transitions to remote work
“Talent should underpin every strategic choice and other business decision you’re making right now,” according to a McKinsey quarterly report. With many high-profile companies already embracing remote-first, remote everything, and digital-by-default business operations, we must ensure that vulnerable employees aren’t left behind in the mass migration to remote work.
Telecommuting could stunt our forward momentum toward gender equity if the right infrastructure isn’t in place to support the transition. For instance, women working remotely could become more invisible. This would lead to even fewer opportunities for advancement, since managers often assign projects to those they can see or have frequent contact with. Additionally, pregnant women, mothers, and caregivers traditionally benefit more from flexible work arrangements than other employee groups. However, their choice to work from home could backfire on them if managers are not trained to value remote and in-person employees equitably.
To this extent, AI can help organizations make calculated transitions to remote work. AI platforms can ensure that human management decisions made across an entire organization are equitable, transparent, data-driven, and free of bias. G7 leaders can incentivize organizations to adopt gender-equitable AI systems and hold organizations accountable for closing gender equity gaps. Incentives can either come as tax breaks or grants (i.e. spending).
In return, governments can increase their tax base, because gender equity has a positive impact on incomes.
Of the 10 countries with the highest net worth, 7 are G7 member states. In other words, the G7 represents a powerful coalition of nations. Money is, after all, a proxy for influence. Let’s use the G7 summit as our platform, our opportunity, to urge leaders to take a stand for gender equity—which, at its core, is about equity for all.
Katica Roy is the CEO and founder of Pipeline Equity.